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CTL Strategies ranked by Asia Law Profiles as a leading tax law firm in the Maldives

The Asia Law Profiles have ranked CTL Strategies as the leading law firm in the areas of taxation in the Maldives. It has also recognized us as the highly recommended firm in the areas of litigation and disputes.

The team at CTL Strategies has been praised by their clients as “dedicated and professional” in representing them in foreign investment and, cross-border taxation matters. The firm has a notably stellar reputation amongst local and multinational businesses in the Maldives, for managing and handling tax controversies and corporate litigation.

Recent News

The Second Amendment to the Tax Administration Bill Introduced to Parliament

The People’s Majilis, on 20 August 2019, conducted the first reading of the proposed Bill for the Second Amendment to the Tax Administration Act. The Amendment is set to introduce several new changes to the tax administration, and enforcement mechanisms, and addresses some key issues that were identified over the past nine years.

Hulhudhoo Constituency Member, Mr. Ilyas Labeeb presented the bill to the members of parliament, and focused on some key areas under the proposed amendments – term limits for the Commissioner General of Taxation, encouraging information exchange between MIRA and other state institutions, and changes to appeal provisions allowing taxpayers to proceed with an appeal after paying thirty percent of the assessed amount were among some of the changes that were highlighted. Kendhoo Constituency Member, Uz. Ali Hussain also lauded the changes proposed in the bill, intimating that the changes make way to easier access to justice, and a fairer tax administration regime in the Maldives.

Members of parliament who spoke on the proposed changes, generally welcomed the positive changes to the law proposed in the bill. Past experiences, by some members of parliament, had shown that the current form of the tax administration regime had led to the use of the tax authority as a political tool used for political coercion, and suppression. The Bill on the Second Amendment to the Tax Administration Act was accepted by the People’s Majilis, by a vote of 72 members in favor, and was sent to the economic committee for further review.

Photo Credits: David Stanley / flickr

Regulation on Construction Period Extension and Rent Deferment Published

On 2 July 2019, the “Regulation on Construction Period Extension and Deferment of Rent and Fines for Places Leased for Tourism Purposes” was published in the Government Gazette. The Regulation sets out the conditions, and procedures for extension of construction period, and the deferment of lease rent and fines for Islands, lands and lagoons leased for the purposes of tourism development.

If a party, who has leased an island, land or a lagoon for tourism purposes, and wishes to extend their construction period, they must fulfil the conditions set out in the Regulation. Parties who wish to extend their construction period must, alongside other conditions, make a deposit as indicated in Schedule 1 of the Regulation as part of a Corporate Social Responsibility contribution. Upon fulfillment of the conditions, the Ministry has the discretion to either grant an extension for the full completion of the tourist establishment, or grant an extension for the leased property to be completed in different phases.

Furthermore, upon the commencement of the Regulation, a 30 day period is granted from the date of commencement for any party, whose construction period has expired, and has not applied for an extension of the construction period, to apply for an extension. Separate rules are set out for parties who fail to apply within the aforementioned 30 day grace period.

The Regulation also permits places that are undergoing development under new construction periods to have their outstanding rent and fines deferred, provided such a party applies for extension under this Regulation. The deferred amounts can then be settled over the remainder of their lease period. In this case, the deferred rent and fine repayments would commence from the 5th year  of commencement of property operation..

The Regulation also allows properties already in operation that intend to cease operations entirely, for renovation or upgrading works to apply for rent deferment for that period. A maximum extension of 2 (two) years will be granted to complete those works, and the Ministry has the discretion to extend this period, provided 50% of the work is completed in accordance with the work plan during the first extension granted.

If a party is unable to complete development of their property by the end of the new construction period, they must pay the amount of outstanding rent and fines within 24 (twenty four) months of the end of the construction period as a lump sum payment. If they are unable to fulfil this condition the Ministry has the discretion to terminate the lease agreement.

Insight

Medianet v MIRA

Blogs

BPT Treatment of Director’s Remuneration

Tax Alert

Changes to Thin Capitalisation Rules